Correlation Between Amaroq Minerals and Anglo Asian

Can any of the company-specific risk be diversified away by investing in both Amaroq Minerals and Anglo Asian at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Amaroq Minerals and Anglo Asian into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amaroq Minerals and Anglo Asian Mining, you can compare the effects of market volatilities on Amaroq Minerals and Anglo Asian and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Amaroq Minerals with a short position of Anglo Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amaroq Minerals and Anglo Asian.

Diversification Opportunities for Amaroq Minerals and Anglo Asian

0.44

Correlation Coefficient

Amaroq Minerals  Anglo Asian

Very weak diversification

The 3 months correlation between Amaroq and Anglo is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Amaroq Minerals and Anglo Asian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Asian Mining and Amaroq Minerals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Amaroq Minerals are associated (or correlated) with Anglo Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Asian Mining has no effect on the direction of Amaroq Minerals i.e., Amaroq Minerals and Anglo Asian go up and down completely randomly.

Pair Corralation between Amaroq Minerals and Anglo Asian

Assuming the 90 days trading horizon Amaroq Minerals is expected to generate 6.02 times less return on investment than Anglo Asian. But when comparing it to its historical volatility, Amaroq Minerals is 1.48 times less risky than Anglo Asian. It trades about 0.04 of its potential returns per unit of risk. Anglo Asian Mining is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  10,500  in Anglo Asian Mining on November 19, 2024 and sell it today you would earn a total of  1,000.00  from holding Anglo Asian Mining or generate 9.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Amaroq Minerals  vs.  Anglo Asian Mining

Amaroq Minerals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amaroq Minerals are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Amaroq Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Anglo Asian Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anglo Asian Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Anglo Asian exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amaroq Minerals and Anglo Asian

The main advantage of trading using opposite Amaroq Minerals and Anglo Asian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amaroq Minerals position performs unexpectedly, Anglo Asian can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Anglo Asian will offset losses from the drop in Anglo Asian's long position.

The idea behind Amaroq Minerals and Anglo Asian Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.